<PAGE>
MANAGERS DISCUSSION AND ANALYSIS
Hewitt Money Market Fund
<TABLE>
<S> <C>
PERFORMANCE AS OF 6/30/00 Thirty-Day Yield
--------------------------------------------------------------------------------
Administrative Shares 6.25%
Institutional Shares 6.59%
</TABLE>
The thirty-day yield is an annualized yield for the thirty-day period ended
June 30, 2000. "Annualized yield" refers to the interest you would earn if you
held a share of the Fund for one year; the yield is prorated if you hold a
share for a shorter period of time. The yield reflects fluctuations in interest
rates on the Fund's investments and expenses for the Fund's administration and
management.
The Money Market Fund invests in high-quality, short-term government and
corporate debt. During the first quarter, the U.S. economy showed continued
signs of strong growth. The Federal Reserve Board raised rates two times during
the quarter. In anticipation of further rate increases, the Fund remained
liquid, with a significant portion positioned in one- and three-month paper.
However, as a hedge against a slowing economy in the short term, a small
portion of the Fund was invested in one-year securities. In addition, the
Fund's exposure to floating rate assets was increased. Because floating rate
notes reset periodically, the portfolio can quickly adjust to movements in
short-term rates.
Prior to the May FOMC meeting, fears of aggressive tightening by the Federal
Reserve Bank led to a steepening of the yield curve that exceeded our
expectations of Fed actions. In response to these market conditions, the Fund
took the opportunity to purchase a modest amount of one-year securities at a
significantly inflated yield. Following the May rate hike, the Fund seized
another opportunity, extending heavily in the three- and six-month sector as
the higher yields on short-term debt reflected the possibility of two further
rate increases in the second half of 2000.
The Fund's semi-annual performance exceeded that of its peer group mainly due
to the following three factors: 1) the Fund benefited from higher-yielding
assets purchased at the end of 1999, when Y2K uncertainties had led many
corporations to issue short-term debt, causing an oversupply of short-term
paper; 2) the Fund had a relatively high amount of cash on hand leading into
the May 16 FOMC meeting. (This cash began to earn the adjusted, higher yield
immediately after the 0.50% increase); and 3) After weak economic data showed a
low probability of a Fed tightening in June, the Fund took advantage of higher
yields offered for extending further out the yield curve. This strategy of
being liquid prior to the FOMC meeting, along with well-timed extension,
resulted in favorable investment results in the first and second quarter.
Once we are confident the tightening cycle is coming to an end, the portfolio
will be extended in a manner that provides competitive returns, adequate
liquidity, and minimal credit risk.
(1) Hewitt Money Market Fund is a "feeder" fund in a "master-feeder" structure.
Instead of investing directly in the individual securities in the
portfolio, the feeder fund, which is offered to the public, holds interests
in the net assets of the Master Portfolio. It is the Master Portfolio that
actually invests in the individual securities. Barclays Global Fund
Advisors advises the Master Portfolio. The Master Portfolio may accept
investments from other feeder funds. Certain events involving other feeder
funds, such as a substantial withdrawal, could affect the Master Portfolio.
<PAGE>
HEWITT MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS
Investments:
In Money Market Master Portfolio ("Master Portfolio"), at market
value (Note 1)................................................. $139,884,281
Receivables:
Due from Hewitt Associates LLC (Note 2)....................... 38,812
------------
Total Assets.................................................... 139,923,093
------------
LIABILITIES
Payables:
Distribution to shareholders.................................. 754,379
Accrued expenses.............................................. 198,538
------------
Total Liabilities............................................... 952,917
------------
NET ASSETS...................................................... $138,970,176
============
Net assets consist of:
Paid-in capital............................................... 138,970,195
Undistributed net realized loss on investments................ (19)
------------
NET ASSETS...................................................... $138,970,176
============
Net Assets--Administrative Shares............................... $ 56,938,871
Shares outstanding--Administrative Shares....................... 569,072
Net asset value and offering price per share--Administrative
Shares......................................................... $ 100.06
Net Assets--Institutional Shares................................ $ 82,031,305
Shares outstanding--Institutional Shares........................ 815,064
Net asset value and offering price per share--Institutional
Shares......................................................... $ 100.64
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
HEWITT MONEY MARKET FUND
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
NET INVESTMENT INCOME ALLOCATED FROM MASTER PORTFOLIO
Interest........................................................ $3,981,487
Expenses........................................................ (63,846)
----------
Net investment income allocated from Master Portfolio............. 3,917,641
----------
FUND EXPENSES (Note 2)
Administration fees--Administrative Shares...................... 27,441
Administration fees--Institutional Shares....................... 35,841
Shareholder servicing fees--Administrative Shares............... 70,866
Shareholder servicing fees--Institutional Shares................ 73,687
Distribution Costs--Administrative Shares....................... 68,603
Fund accounting & transfer agent fees........................... 29,981
Legal fees...................................................... 12,489
Audit fees...................................................... 6,994
Printing costs.................................................. 19,983
Registration costs.............................................. 33,722
Trustee fees.................................................... 8,044
Other expenses.................................................. 1,493
----------
Total fund expenses............................................... 389,144
----------
Less:
Fees reimbursed by Hewitt Associates LLC (Note 2)............... (81,359)
----------
Total Net Expenses................................................ 307,785
----------
NET INVESTMENT INCOME............................................. 3,609,856
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM
MASTER PORTFOLIO
Net realized gain............................................... 10
----------
Net gain on investments allocated from Money Market Master
Portfolio........................................................ 10
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. $3,609,866
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
HEWITT MONEY MARKET FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six
Months Ended
June 30,
2000 For the Year Ended For the Year Ended
(Unaudited) December 31, 1999* February 28, 1999**
------------ ------------------ -------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
Operations:
Net investment income.... $ 3,609,856 $ 2,930,732 $ 540,646
Net realized gain........ 10 161 0
------------ ------------ ------------
Net increase in net assets
resulting from
operations............... 3,609,866 2,930,893 540,646
------------ ------------ ------------
Distributions to
shareholders:
From net investment
income
Administrative Shares.... (1,509,238) (1,894,788) (423,411)
Institutional Shares..... (2,100,618) (1,035,944) (117,235)
From net realized gain on
sale of investments
Administrative Shares.... 0 (128) 0
Institutional Shares..... 0 (62) 0
------------ ------------ ------------
Total distributions to
shareholders............. (3,609,856) (2,930,922) (540,646)
------------ ------------ ------------
Capital share
transactions:
Administrative Shares
Proceeds from shares
sold--Administrative
Shares.................. 96,081,221 94,041,302 59,583,039
Reinvestment of
dividends--
Administrative Shares... 987,838 1,894,916 423,168
Cost of shares redeemed--
Administrative Shares... (94,448,590) (87,533,582) (14,090,428)
------------ ------------ ------------
Net increase in net assets
resulting from capital
share transactions--
Administrative Shares.... 2,620,469 8,402,636 45,915,779
------------ ------------ ------------
Institutional Shares
Proceeds from shares
sold--Institutional
Shares.................. 201,970,610 103,707,117 19,171,866
Reinvestment of
dividends--Institutional
Shares.................. 1,634,551 1,036,006 117,140
Cost of shares redeemed--
Institutional Shares.... (164,642,027) (72,624,332) (8,339,620)
------------ ------------ ------------
Net increase in net assets
resulting from capital
share transactions--
Institutional Shares..... 38,963,134 32,118,791 10,949,386
------------ ------------ ------------
Increase in net assets.... 41,583,613 40,521,398 56,865,165
NET ASSETS:
Beginning of period....... 97,386,563 56,865,165 0
------------ ------------ ------------
End of period............. $138,970,176 $ 97,386,563 $ 56,865,165
============ ============ ============
SHARES ISSUED AND
REDEEMED:
Administrative Shares
Shares sold--
Administrative Shares... 958,260 938,431 595,438
Shares issued in
reinvestments of
dividends--
Administrative Shares... 9,873 18,944 4,231
Shares redeemed--
Administrative Shares... (941,973) (873,524) (140,608)
------------ ------------ ------------
Net increase (decrease) in
shares outstanding--
Administrative Shares.... 26,160 83,851 459,061
============ ============ ============
Institutional Shares
Shares sold--
Institutional Shares.... 2,002,658 1,031,069 191,080
Shares issued in
reinvestments of
dividends--Institutional
Shares.................. 16,240 10,318 1,169
Shares redeemed--
Institutional Shares.... (1,632,282) (722,108) (83,080)
------------ ------------ ------------
Net increase (decrease) in
shares outstanding--
Institutional Shares..... 386,616 319,279 109,169
============ ============ ============
--------------------------------------------------------------------------------
</TABLE>
* For the ten months ended December 31, 1999. The Fund changed its fiscal
year end from February 28 to December 31.
** For the period from October 1, 1998 (commencement of operations) to
February 28, 1999.
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
HEWITT MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
Six Months Ended
Jun. 30, 2000 Period Ended Period Ended
(Unaudited) Dec. 31, 1999* Feb. 28, 1999**
---------------------------- ------------------------------ ----------------------------
Administrative Institutional Administrative Institutional Administrative Institutional
Shares Shares Shares Shares Shares Shares
-------------- ------------- -------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $100.05 $100.52 $100.02 $100.30 $100.00 $100.00
------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment
income............... 2.71 2.76 3.83 3.90 1.83 1.97
Net realized and
unrealized gain on
investments.......... 0.01 0.12 0.03 0.22 0.00 0.00
------- ------- ------- ------- ------- -------
Total from investment
operations............. 2.72 2.88 3.86 4.12 1.83 1.97
------- ------- ------- ------- ------- -------
Less distributions:
From net investment
income............... (2.71) (2.76) (3.83) (3.90) (1.81) (1.67)
From net realized
gains................ 0.00 0.00 (0.00)**** (0.00)**** (0.00) (0.00)
------- ------- ------- ------- ------- -------
Total distributions..... (2.71) (2.76) (3.83) (3.90) (1.81) (1.67)
------- ------- ------- ------- ------- -------
Net asset value, end of
period................. $100.06 $100.64 $100.05 $100.52 $100.02 $100.30
======= ======= ======= ======= ======= =======
Total return............ 2.74% 2.90% 3.92% 4.18% 1.84% 1.98%
======= ======= ======= ======= ======= =======
Ratios/Supplemental
data:
Net assets, end of
period (000s)........ $56,939 $82,031 $54,318 $43,068 $45,916 $10,949
Ratio of expenses to
average net
assets(1)***......... 0.75% 0.45% 0.74% 0.44% 0.75% 0.45%
Ratio of net
investment income to
average net
assets(2)***......... 5.45% 5.83% 4.61% 5.03% 4.52% 4.86%
--------------------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to
average net assets
prior to waived fees
and reimbursed
expenses***......... 0.88% 0.58% 1.02% 0.72% 1.32% 1.62%
(2) Ratio of net
investment income
(loss) to average
net assets prior to
waived fees and
reimbursed
expenses***......... 5.32% 5.70% 4.33% 4.75% 3.95% 3.69%
--------------------------------------------------------------------------------------------------------------------
</TABLE>
* For the ten months ended December 31, 1999. The Fund changed its fiscal
year end from February 28 to December 31.
** For the period from October 1, 1998 (commencement of operations) to
February 28, 1999.
*** Annualized
**** Rounds to less than $0.01.
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
HEWITT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Summary of Significant Accounting Policies
Hewitt Money Market Fund (the "Fund") is a series of Hewitt Series Trust
(the "Trust"), a diversified open-end management investment company registered
under the Investment Company Act of 1940, as amended. The Trust was
established as a Delaware business trust organized pursuant to a Declaration
of Trust on July 7, 1998.
The Fund presently offers two classes of shares, Administrative Shares and
Institutional Shares. Shares of each class have identical interests in the
Fund and have the same rights, however, differ principally in their respective
distribution fees and shareholder servicing fees.
The following significant accounting policies are consistently followed by
the Fund in the preparation of its financial statements, and such policies are
in conformity with generally accepted accounting principles for investment
companies. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
Investment Policy and Security Valuation
The Fund invests all of its assets in the Money Market Master Portfolio (the
"Master Portfolio"), a series of Master Investment Portfolio ("MIP"). The
Master Portfolio has the same investment objective as the Fund. The value of
the Fund's investment in the Master Portfolio reflects the Fund's interest in
the net assets of the Master Portfolio (38.08% as of June 30, 2000).
The method by which the Master Portfolio values its securities is discussed
in Note 1 of the Master Portfolio's Notes to Financial Statements, which are
included elsewhere in this report.
Security Transactions and Income Recognition
The Fund records daily, its proportionate interest in the net investment
income and realized and unrealized gains and losses of the Master Portfolio.
The performance of the Fund is directly affected by the performance of the
Master Portfolio. The financial statements of the Master Portfolio, including
the Portfolio of Investments, are included elsewhere in this report and should
be read in conjunction with the Fund's financial statements.
Federal Income Taxes
The Fund is treated as a separate entity for federal income tax purposes. It
is the policy of the Trust that the Fund continue to qualify as a regulated
investment company by complying with the provisions of the Internal Revenue
Code of 1986, as amended (the "Code") applicable to regulated investment
companies, and to distribute substantially all of its investment company
taxable income and any net realized gains (after taking into account any
capital loss carryforwards) sufficient to relieve it from all, or
substantially all, federal income and excise taxes. Accordingly, no provision
for federal taxes was required at June 30, 2000.
6
<PAGE>
HEWITT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited)--(Continued)
Dividends and Distributions to Shareholders
Dividends to shareholders from net investment income of the Fund are
declared and distributed monthly. Distributions to shareholders from capital
gains, if any, are declared and distributed annually, generally in December.
2 Agreement and Other Transactions with Affiliates
Hewitt Associates LLC (the "Administrator") provides administrative services
to the Fund. The Fund pays the Administrator a monthly fee calculated at an
annual rate of 0.10% of the Fund's average daily net assets. The Administrator
has agreed to waive its fees or absorb expenses of the Fund to the extent
necessary to assure that total ordinary operating expenses of the Fund, on an
annual basis, do not exceed 0.45% and 0.75% of the average daily net assets of
the Fund attributable to Institutional and Administrative Shares,
respectively. The Administrator may not modify or terminate this waiver
agreement without approval of the Board of Trustees of the Trust. For the
period ended June 30, 2000, the Administrator reimbursed the Fund $35,650 and
$45,709 for expenses related to Administrative Shares and Institutional
Shares, respectively.
Hewitt Services LLC (the "Distributor") serves as the Distributor of the
Fund's shares. The Trust has adopted a plan pursuant to Rule 12b-1 under the
Investment Company Act which allows the Fund to pay expenses relating to the
distribution of Administrative Shares. Under the plan, the Fund pays a fee to
the Distributor, calculated at an annual rate of 0.25% of the average daily
net assets of the Fund attributable to Administrative Shares, as compensation
for services rendered in connection with the sale and distribution of
Administrative Shares. This fee is an expense of Administrative Shares only
and is not borne by Institutional Shares.
The Administrator also serves as the Shareholder Servicing Agent for
Institutional Shares. As Shareholder Servicing Agent, the Administrator is
responsible for receiving on behalf of the Fund's Transfer Agent orders by
employee benefit plans to purchase and redeem Institutional Shares. The
Administrator is also responsible for maintaining records showing the number
of Institutional Shares allocable to individual participant accounts in those
plans. In addition, the Admistrator sends all shareholder communications
relating to the Fund to shareholders and to plan participants or arranges for
these materials to be sent. For these services, the Fund pays the
Administrator a monthly fee calculated at an annual rate of 0.20% of the
average daily net assets of the Fund attributable to Institutional Shares.
This fee is an expense of Institutional Shares only and is not borne by
Administrative Shares.
The Distributor also serves as the Shareholder Servicing Agent for
Administrative Shares. As Shareholder Servicing Agent, the Distributor is
responsible for maintaining records showing the number of Administrative
Shares owned by IRAs established through the Distributor and by other
investors who have purchased Administrative Shares through the Distributor. In
addition, the Distributor sends all shareholder communications relating to the
Fund to holders of Administrative Shares or arranges for these materials to be
sent. For these services, the Fund pays the Distributor a monthly fee
calculated at an annual rate of 0.25% of average daily net assets of the Fund
attributable only to Administrative Shares. This fee is an expense of
Administrative Shares only and is not borne by Institutional Shares. The Fund
also reimburses each Shareholder Servicing Agent for certain out-of-pocket
expenses.
7
<PAGE>
MONEY MARKET MASTER PORTFOLIO
JUNE 30, 2000 (Unaudited)
Schedule of Investments
<TABLE>
<CAPTION>
Security Principal Value
-------- ----------- ------------
<S> <C> <C>
BANKERS' ACCEPTANCES--0.78%
Toronto-Dominion Bank
6.63%, 12/13/00 $ 2,948,667 $ 2,859,064
------------
TOTAL BANKERS' ACCEPTANCES (Cost: $2,859,064) 2,859,064
------------
CERTIFICATES OF DEPOSIT--11.84%
Bank of America NA
6.72%, 09/13/00 5,000,000 5,000,465
Banque National de Paris
6.99%, 05/02/01 3,500,000 3,499,723
Bayerische Hypo-Und Vereinsbank AG
6.63%, 08/21/00 5,000,000 5,000,062
6.72%, 09/14/00 5,000,000 5,000,141
7.00%, 05/02/01 3,500,000 3,499,447
Bayerische Landesbank
5.93%, 10/02/00 5,000,000 4,986,400
Deutsche Bank AG
6.66%, 03/08/01 5,000,000 4,998,699
6.70%, 03/14/01 6,500,000 6,497,837
Societe Generale
6.90%, 03/29/01 5,000,000 4,998,593
------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost: $43,481,367) 43,481,367
------------
COMMERCIAL PAPER--59.21%
Accor BNP
6.58%, 08/16/00 5,000,000 4,957,961
6.62%, 07/18/00 3,935,000 3,922,699
Alpine Securitization Corp.
6.55%, 07/18/00 2,609,000 2,600,930
6.85%, 07/14/00 10,000,000 9,975,264
Associates Corp. of North America
6.95%, 07/03/00 5,000,000 4,998,069
Atlantis One Funding Corp.
6.58%, 07/13/00 5,000,000 4,989,033
</TABLE>
<TABLE>
<CAPTION>
Security Principal Value
-------- ----------- ------------
<S> <C> <C>
Barton Capital Corp.
6.61%, 09/12/00 $ 5,000,000 $ 4,932,982
6.62%, 07/18/00 4,000,000 3,987,496
6.62%, 08/24/00 3,000,000 2,970,210
British Telecommunications
6.28%, 10/12/00 5,000,000 4,910,161
Centric Capital Corp.
6.63%, 07/25/00 3,000,000 2,986,740
Corporate Asset Funding Co.
6.19%, 07/10/00 5,000,000 4,992,262
6.52%, 07/12/00 3,000,000 2,994,023
Countrywide Home Loans Inc.
6.57%, 07/10/00 3,000,000 2,995,072
6.75%, 07/20/00 5,000,000 4,982,188
Falcon Asset Securitization Corp.
6.55%, 07/03/00 1,085,000 1,084,605
6.55%, 07/25/00 5,000,000 4,978,167
Fayette Funding Corp.
6.77%, 07/21/00 5,000,000 4,981,194
Forrestal Funding Corp.
6.60%, 08/11/00 5,000,000 4,962,417
General Electric Capital Corp.
6.54%, 07/28/00 5,000,000 4,975,475
6.60%, 09/06/00 1,745,000 1,723,566
6.62%, 09/11/00 1,200,000 1,184,112
6.62%, 09/12/00 1,200,000 1,183,892
General Motors Acceptance Corp.
7.10%, 07/03/00 10,000,000 9,996,056
Goldman Sachs Group Inc.
6.61%, 09/11/00 5,000,000 4,933,900
Greenwich Funding Corp.
6.60%, 07/17/00 5,000,000 4,985,333
6.68%, 08/23/00 3,180,000 3,148,727
International Securitization Corp.
6.62%, 07/11/00 4,000,000 3,992,645
</TABLE>
8
<PAGE>
MONEY MARKET MASTER PORTFOLIO
JUNE 30, 2000 (Unaudited)--Continued
Schedule of Investments
<TABLE>
<CAPTION>
Security Principal Value
-------- ---------- ------------
<S> <C> <C>
Intrepid Funding
6.06%, 08/07/00 $4,000,000 $ 3,975,086
Kitty Hawk Funding Corp.
6.61%, 09/11/00 5,000,000 4,933,900
Koch Industries Inc.
7.00%, 07/05/00 8,000,000 7,993,778
Lexington Parker Capital Corp.
6.19%, 07/11/00 5,000,000 4,991,403
6.56%, 07/10/00 2,154,000 2,150,468
6.61%, 09/01/00 2,514,000 2,485,381
6.70%, 08/24/00 3,000,000 2,969,850
Liberty Street Funding Corp.
6.64%, 09/19/00 5,000,000 4,926,222
6.68%, 08/21/00 4,000,000 3,962,147
Moat Funding LLC
6.64%, 09/20/00 5,000,000 4,925,356
6.70%, 08/23/00 3,000,000 2,970,408
6.70%, 12/12/00 5,000,000 4,847,389
Moriarty LLC
6.35%, 09/25/00 2,000,000 1,969,661
6.56%, 07/10/00 5,000,000 4,991,800
6.70%, 12/15/00 5,000,000 4,844,597
Prudential Funding Corp.
6.31%, 10/23/00 5,000,000 4,900,092
Quincy Capital Corp.
6.55%, 07/25/00 5,907,000 5,881,206
6.56%, 07/14/00 1,726,000 1,721,911
Silver Tower US Funding LLC
6.63%, 09/25/00 5,000,000 4,920,808
Variable Funding Capital Corp.
6.60%, 07/18/00 5,000,000 4,984,417
Windmill Funding Corp.
6.62%, 07/10/00 5,000,000 4,991,725
6.95%, 07/03/00 7,836,000 7,832,974
------------
TOTAL COMMERCIAL PAPER (Cost:
$217,495,758) 217,495,758
------------
</TABLE>
<TABLE>
<CAPTION>
Security Principal Value
-------- ----------- ------------
<S> <C> <C>
MEDIUM TERM NOTES--4.90%
AmeriCredit Corp.
6.89%, 06/05/01 $ 8,000,000 $ 8,000,000
Associates Automobile 2000-1 "A-1"
6.85%, 06/15/01 5,000,000 5,000,000
Ford Credit Auto Owner Trust 2000-C "A-2"
6.82%, 06/15/01 5,000,000 5,000,000
------------
TOTAL MEDIUM TERM NOTES (Cost: $18,000,000) 18,000,000
------------
VARIABLE & FLOATING RATE NOTES--22.95%
Associates Manufactured Housing Certificates
6.88%, 10/16/00 4,569,784 4,569,784
Bank of America
6.65%, 04/27/01 5,000,000 5,000,000
Bayerische Landesbank
6.59%, 02/28/01 5,000,000 4,998,382
CIT Equipment Collateral
6.64%, 03/20/01 10,000,000 10,000,000
Countrywide Home Loans Inc.
7.15%, 08/28/00 4,715,000 4,717,276
First Union National Bank
6.65%, 05/29/01 5,000,000 5,000,000
Ford Motor Credit Co.
6.45%, 07/16/01 10,000,000 10,014,745
6.74%, 08/18/00 7,000,000 6,999,087
National City Bank
6.63%, 10/04/00 8,000,000 7,997,508
Norwest Financial Inc.
6.64%, 09/07/00 5,000,000 4,999,451
Sigma Finance Inc.
6.90%, 09/15/00 5,000,000 5,000,000
SMM Trust 2000-B "A-1"
6.81%, 12/15/00 5,000,000 5,000,000
SMM Trust 2000-E
6.67%, 03/14/01 5,000,000 5,000,000
</TABLE>
9
<PAGE>
MONEY MARKET MASTER PORTFOLIO
JUNE 30, 2000 (Unaudited)--Continued
Schedule of Investments
<TABLE>
<CAPTION>
Security Principal Value
-------- ---------- ------------
<S> <C> <C>
Special Purpose Accounts Receivable Corp.
6.65%, 01/05/01 $5,000,000 $ 5,000,000
------------
TOTAL VARIABLE & FLOATING RATE NOTES
(Cost: $84,296,233) 84,296,233
------------
REPURCHASE AGREEMENTS--0.00%
Morgan Stanley Tri Party Repurchase Agreement, dated
6/30/00, due 7/03/00, with a maturity value of $451
and an effective yield of 6.30% 451 451
------------
TOTAL REPURCHASE AGREEMENTS
(Cost: $451) 451
------------
TOTAL INVESTMENTS IN SECURITIES--99.68% (Cost $366,132,873)* 366,132,873
------------
Other Assets, Less Liabilities--0.32% 1,220,874
------------
NET ASSETS--100.00% $367,353,747
============
</TABLE>
--------
* Cost for income tax purposes is the same as for financial statement purposes.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
MONEY MARKET MASTER PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS
Investments at market value (Cost: $366,132,873) (Note 1)......... $366,132,873
Receivables:
Interest........................................................ 1,322,821
------------
Total Assets...................................................... 367,455,694
------------
LIABILITIES
Payables:
Due to BGI (Note 2)............................................. 101,947
------------
Total Liabilities................................................. 101,947
------------
NET ASSETS........................................................ $367,353,747
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
MONEY MARKET MASTER PORTFOLIO
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
NET INVESTMENT INCOME
Interest.......................................................... $8,855,215
----------
Total investment income........................................... 8,855,215
----------
EXPENSES (NOTE 2)
Advisory fees..................................................... 141,718
----------
Total expenses...................................................... 141,718
----------
NET INVESTMENT INCOME............................................... 8,713,497
----------
Net realized gain on sale of investments.......................... 22
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................ $8,713,519
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
MONEY MARKET MASTER PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six Months
Ended For the Period For the Period
June 30, 2000 Ended Ended
(Unaudited) December 31, 1999* February 28, 1999**
------------------ ------------------ -------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
Operations:
Net investment
income............... $ 8,713,497 $ 9,767,206 $ 5,411,548
Net realized gain..... 22 4,552 --
------------- ------------- ------------
Net increase (decrease)
in net assets resulting
from operations........ 8,713,519 9,771,758 5,411,548
------------- ------------- ------------
Interestholder
transactions:
Contributions......... 514,970,795 343,767,992 257,234,773
Withdrawals........... (401,803,829) (370,712,809) --
------------- ------------- ------------
Net increase (decrease)
in net assets resulting
from interestholder
transactions........... 113,166,966 (26,944,817) 257,234,773
------------- ------------- ------------
Increase (decrease) in
net assets............. 121,880,485 (17,173,059) 262,646,321
NET ASSETS:
Beginning of period..... 245,473,262 262,646,321 --
------------- ------------- ------------
End of period........... $ 367,353,747 $ 245,473,262 $262,646,321
============= ============= ============
</TABLE>
--------
* For the ten months ended December 31, 1999. The Master Portfolio changed its
fiscal year end from February 28 to December 31.
** For the period from September 1, 1998 (commencement of operations) to
February 28, 1999.
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
MONEY MARKET MASTER PORTFOLIO
NOTES TO THE FINANCIAL STATEMENTS (Unaudited)
1. Significant Accounting Policies
Master Investment Portfolio ("MIP") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company. MIP was organized on October 20, 1993 as a Delaware
business trust pursuant to an Agreement and Declaration of Trust dated May 14,
1993, and had no operations prior to March 1, 1994. MIP currently issues the
following separate portfolios: Asset Allocation, Bond Index, Extended Index,
International Index, LifePath Income, LifePath 2010, LifePath 2020, LifePath
2030, LifePath 2040, Money Market, S&P 500 Index and U.S. Equity Index Master
Portfolios.
These financial statements relate to the Money Market Master Portfolio (the
"Master Portfolio").
The following is a summary of significant accounting policies which are
consistently followed by the MIP in the preparation of its financial
statements, and which are in conformity with generally accepted accounting
principles for investment companies. The preparation of financial statements
in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from
those estimates.
Security Valuation
The Master Portfolio uses the amortized cost method of valuation to
determine the value of its portfolio securities in accordance with Rule 2a-7
under the 1940 Act. The amortized cost method, which involves valuing a
security at its cost and accreting or amortizing any discount or premium,
respectively, over the period until maturity, approximates market value.
Security Transactions and Income Recognition
Security transactions are accounted for on the date securities are purchased
or sold (trade date). Interest income is recognized on a daily accrual basis.
Realized gains or losses are reported on the basis of identified cost of
securities delivered. The Master Portfolio amortizes premium and accretes
discount on a straight-line basis to maturity.
Federal Income Taxes
MIP believes that the Master Portfolio has and will continue to be operated
in a manner so as to qualify it as a partnership for federal income tax
purposes. Provided that the Master Portfolio so qualifies, it will not be
subject to any federal income tax on its income and gain (if any). However,
each investor in the Master Portfolio will be taxed on its distributive share
of the Master Portfolio's taxable income in determining its federal income tax
liability. As a partnership for federal income tax purposes, the Master
Portfolio will be deemed to have "passed through" to interestholders any
interest, dividends, gains or losses for such purposes. The determination of
such share will be made in accordance with the Internal Revenue Code of 1986,
as amended (the "Code"), and regulations promulgated thereunder.
It is intended that the Master Portfolio's assets, income and distributions
will be managed in such a way that an entity electing and qualifying as a
"regulated investment company" under the Code can continue to so qualify by
investing substantially all of its assets through the Master Portfolio,
provided that the regulated investment company meets other requirements for
such qualifications not within the control of the Master
14
<PAGE>
MONEY MARKET MASTER PORTFOLIO
NOTES TO THE FINANCIAL STATEMENTS (Unaudited)--Continued
Portfolio (e.g., distributing at least 90% of the regulated investment
company's "investment company taxable income" annually).
Repurchase Agreements
Transactions involving purchases of securities under agreements to resell
such securities at a specified price and time ("repurchase agreements") are
treated as collateralized financing transactions and are recorded at their
contracted resale amounts. These repurchase agreements, if any, are detailed
in the Master Portfolio's Schedule of Investments. The advisor to the Master
Portfolio may pool the Master Portfolio's cash and invest in repurchase
agreements entered into by the other Master Portfolios. The Master Portfolio's
prospectus requires that the cash investments be fully collateralized based on
values that are marked to market daily. The collateral is generally held by an
agent bank under a tri-party agreement. It is the advisor's responsibility to
value collateral daily and to obtain additional collateral as necessary to
maintain the value at equal to or greater than the repurchase price.
The repurchase agreement entered into on June 30, 2000 by the Master
Portfolio is fully collateralized by U.S. Government obligations with a rate
of 5.625%, a maturity date of 02/15/06 and an aggregate market value of
$9,910.
2. Agreements and Other Transactions With Affiliates
Pursuant to an Investment Advisory Contract with the Master Portfolio,
Barclays Global Fund Advisors ("BGFA") provides investment guidance and policy
direction in connection with the management of the Master Portfolio's assets.
BGFA is entitled to receive 0.10% of the average daily net assets of the
Master Portfolio, as compensation for advisory services. BGFA is an indirect
subsidiary of Barclays Bank PLC.
Investors Bank & Trust Company ("IBT") serves as the custodian to the Master
Portfolio. IBT will not be entitled to receive fees for its custodial services
so long as it is entitled to receive a separate fee from Barclays Global
Investors, N.A. ("BGI") for its services as Sub-Administrator of the Master
Portfolio.
Stephens Inc. ("Stephens"), is the sponsor and placement agent for the
Master Portfolio.
The MIP has entered into administration services arrangements with BGI and
Stephens, as co-administrators, who have agreed jointly to provide general
administration services to the Master Portfolio, such as managing and
coordinating third-party service relationships. BGI and Stephens are not
entitled to compensation for providing administration services to the Master
Portfolio. BGI and Stephens may delegate certain of their administration
duties to sub-administrators.
Certain officers and trustees of MIP are also officers of Stephens. As of
June 30, 2000, these officers of Stephens collectively owned less than 1% of
the Master Portfolio's outstanding beneficial interests.
15
<PAGE>
MONEY MARKET MASTER PORTFOLIO
NOTES TO THE FINANCIAL STATEMENTS (Unaudited)--Continued
3. Financial Highlights
The ratios of expenses to average net assets and net investment income to
average net assets for the Master Portfolio are as follows:
<TABLE>
<CAPTION>
Six Months
Ended For the Period For the Period
June 30, 2000 Ended Ended
(Unaudited) December 31, 1999* February 28, 1999**
------------- ------------------ -------------------
<S> <C> <C> <C>
Ratio of expenses to
average net assets+..... 0.10% 0.10% 0.10%
Ratio of net investment
income to average net
assets+................. 6.16% 5.23% 5.17%
</TABLE>
--------
* For the ten months ended December 31, 1999. The Master Portfolio changed
its fiscal year-end from February 28 to December 31.
** For the period from September 1, 1998 (commencement of operations) to
February 28,1999.
+ Annualized for period of less than one year.
16
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
HEWITT MONEY MARKET FUND
Manager's Discussion and Analysis.................................... 1
Statement of Assets and Liabilities.................................. 2
Statements of Operations............................................. 3
Statements of Changes in Net Assets.................................. 4
Financial Highlights................................................. 5
Notes to Financial Statements........................................ 6
MASTER INVESTMENT PORTFOLIO
Schedule of Investments.............................................. 8
Statement of Assets and Liabilities.................................. 11
Statements of Operations............................................. 12
Statements of Changes in Net Assets ................................. 13
Notes to the Financial Statements ................................... 14
</TABLE>
--------------------------------------
[PHOTO]
Hewitt
Money Market
Fund
Semi-Annual Report
June 30, 2000
--------------------------------------
